Court of Cassation, no. 24629/2021

Bankruptcy of the de facto supercompany

The Court of Cassation, in its judgment no. 24629/2021, published on 13 September 2021, held that the merely incidental finding of the existence of a so-called de facto supercompany does not automatically lead to its bankruptcy should one of its partners be insolvent.

In this case, the Court of Teramo, finding the existence of a de facto supercompany between an already bankrupt limited liability company (S.r.l.) and another limited liability company, extended the bankruptcy from the former to the latter pursuant to Article 147(1) of the Bankruptcy Law.  

The Court of Appeal of L'Aquila upheld the complaint lodged pursuant to Article 18 of the Bankruptcy Law, since the Court had made the bankruptcy of the second limited liability company dependent on the bankruptcy of the first limited liability company, pursuant to Article 147(1) of the Bankruptcy Law (not applicable to the case in question), without first declaring the bankruptcy of the supercompany.

In upholding the judgment of the Court of Appeal, the Supreme Court firstly emphasised that the case before it fell within the scope of Article 147(5) of the Bankruptcy Law.

It therefore excluded the application of the provisions of Article 147(1) and (4) of the Bankruptcy Law, which provide for other cases. 

According to the Court, Article 147(4) of the Bankruptcy Law concerns the case of the participation of given partners - who are secret and with unlimited liability - in a given company, which is in itself known (or in any case now ‘revealed’ following a specific adjudication of bankruptcy): with the consequence that the bankruptcy of these secret partners is a dependent bankruptcy (not unlike the bankruptcy regulated by Article 147(1) for known partners).

Art. 147(5), on the other hand, governs the case in which, having declared the bankruptcy of a person, it is subsequently discovered that, in reality, the enterprise is ‘referable’ to another company (of which, moreover, the person already declared bankrupt is a partner with unlimited liability). In this case, the subjective term of reference of enterprise organisation and management actually changes.

Considering, therefore, that the de facto supercompany is an entity that is different from its partners, which manifests the existence of a different entrepreneurial organisation from that of the partner already declared bankrupt, it follows de plano that the actual finding of the existence of a de facto supercompany does not entail an implicit declaration of its bankruptcy. 

Therefore, the Supreme Court concluded that the bankruptcy of the partners with unlimited liability of a de facto super-company cannot be adjudicated on the basis of a merely incidental finding of its existence, not only because the adjudication is constitutive in nature and therefore effective ex nunc, but also because the insolvency of the partner already declared bankrupt does not necessarily correspond to the insolvency of the de facto company (from which, pursuant to Article 147(1) of the Bankruptcy Law, the insolvency of the partners who participate in it may then be derived).

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